If you missed the ABC 20/20 Special on Flat Broke: Begging and Borrowing in America, you didn’t miss much. It’s so sad when shows like this try to cram so much into one hour that they just skim the surface of things. What could have been a great show that could have helped many people ended up being like a water spider zipping across a pond aimlessly.
The show was broken down into segments:
Matt and Suzie Peterson have three little girls, a big house with a pool, two timeshares, nice cars and $60,000 in credit card debt. Their financial situation really went downhill when Matt lost his job and he was unemployed for a year. Suzie tried a scrapbookking business only to have it fail. All that time of limited funds, they kept spending like they were before except it was being finances with their credit cards.
One statement that Suzie made that sticks out in my mind is that she doesn’t regret spending money. Even Elizabeth Vargas seemed a little surprised at her comment. Suzie argued that you could be gone tomorrow and you should live life now. I agree you should live life, but if you have to claim bankruptcy and you lose everything…well, I shudder to think about that happening to us. There is a healthy balance that needs to be found.
To help the Petersons, they brought in Robert Pagliarini, a financial advisor, to help them. After Robert took a look at the Peterson’s finances, it was determined they had a net worth of $8,000. In Robert’s words, this family was close to the edge of financial ruin. The Petersons were hoping to win the lottery but Robert gave them a pretty strict set of things they need to do to make things better. It was an all or nothing plan. On it, they had to sell their house and their timeshares and the rest of the list I couldn’t catch because they didn’t discuss it only showed it quickly on the screen. While Suzie wasn’t really enthusiastic about the plan, both husband and wife agreed to do it. I wonder how the Petersons are doing now, and if they kept with it.
Steve and Annette Economides (what a last name, eh? :)) and their 5 children live debt-free on an income of less than $35,000/year. They attribute their success to careful planning. Their monthly trip to a grocery store is planned down to bringing walkie talkies so Steve and Annette can talk and compare prices on different sides of the store. They shop monthly because Annette plans their meals in a 30-day menu system. And coupons? They use lots of coupons. They say that the pennies you save all add up. Very true.
We actually have a lot in common with the Economides. When they find food at a price that is low enough, they stock up and buy a lot. I love to do that. They also purchase lunch meat (pre-packaged) that is about to expire. Annette claims they do that because they have never gotten sick. Well, as someone who worked in a grocery store I can tell you that the expiration dates are the dates that the stores need to pull product from the shelves. Most products are still good for a while after those dates. I wish they focused more on the other things they do to live on so little, but the show didn’t.
The next segment of the show was about Debt Collectors. Wow, this part made me feel sick to my stomach. One of the recorded calls they played on a show exampled how crazed some debt collectors can get, “Why don’t you just go jump in front of a train…get it over with.” Man, that made my blood boil. They played more and more calls that again showed how agressive, mean, and ILLEGAL some of these calls can be.
Consumer complaints about collection calls have risen 14%. If you happen to be a victim of overzealous debt collectors, the show gave a few tips: 1.) Contact the Federal Trade Commission 2.) Contact a lawyer and 3.) Tape the conversations. Debt collectors have
no right to call you at work(EDIT – A commenter mentioned that they CAN call you at work.Â I’m striking that statement out until I can take a look.Â What I wrote was information I obtained from the show), threaten dire consequences or say that you have committed a crime. This was good information from the show, but I barely wrote it down because they went so fast!
Beggars, a.k.a. Cyberbegging
Dustin Diamond, before recently, was best known for his role playing “Screech” on the teen show, “Saved by the Bell.” Now that Screech is all grown up, most of the money earned while on the show has been spent due to mismanagement by his father. He left the limelight and bought a home in Wisconsin and found himself in a shady land deal. They gave Dustin 30 days to pay $250,000 or he would lose his home. Since he didn’t have any money, he started up a website where fans could buy T-shirts for $15.00 each to help save his house. He ended up selling 22,000 shirts and he still has his house.
Dustin also had some “adult” things surface on the internet that has since helped his financial situation but we will not go there. Not sure why they mentioned that in the show. I always wonder about things when they “leak” out.
The next gal they mentioned I have heard of before, Karyn Bosnak. She admits she is a shopaholic and wracked up some credit card debt. She created a site, Save Karyn where she asked people to donate a dollar each to help get her out of debt. Well, it worked. Strangers paid off her debt and now she’s published a book and a studio has movie rights to the book.
I checked Karyn’s site tonight to make sure I spelled her last name correctly and I found this tidbit:
“I was interviewed on 20/20 tonight for a special on debt. If you saw me on the show and are new to this site, thanks for stopping by. What 20/20 failed to mention is that after publishing my book, I donated all the money I received from savekaryn.com to charity. So I essentially DID pay off my debt and helped raise $20,000 for charity in the process. Funny how this was edited out of my interview. I only said it, um… three times.”
That was something important that I feel ABC left out and I’m glad Karyn put that on her site for clarification. There’s always a part of the story missing.
I didn’t catch everything with the little bit they have about Dave Ramsey. I became upset when they played a clip of him on his show demonstrating “tough love” by using the word stupid. It sounded just like the nasty debt collectors. That’s all I’ll say about that.
Here’s the other side of the debt collectors story on how they do good for the economy. After all, the small business owner who has to write off bad debt will have to raise prices to make up for the lost money. I do believe that debts should be repaid, and this part of the show made me feel a little better about debt collectors. The ones the showed here worked with people to try to pay the debt and make things right. They even gave options for payment plans or offered to lower the total amount due to settle the amount.
As an afterthought as a conclusion for the show, John Stossel and Elizabeth Vargas took turns explaning two formulas to use to see how you are doing financially. Seriously – those forumlas were on the screen for a few seconds! I was getting accustomed to scribbling notes as fast as I could through the whole show, so I was able to catch them.
– Add up all of your monthly debt payments. They should not be more than one third of your monthly pre-tax earnings.
– Take your age and divide by 2. That is the percentage of your income that you should be saving.
The show had interesting tidbits, but it was a lot thrown at you yet not enough (if that makes sense). I think it would have been much better if they took each of the big segments (the two families, the debt collectors, and the cyberbeggers) and made one show on each. I was left wanting more after the show but that was it.
Thanks for the recap. I missed the show. Too bad they put a less than promising glint on Dave Ramsey. I have really learned alot from him. I would definitely recommend his site. There are some free forms and lots of good advice. It’s too bad people want a change but aren’t willing to change. Sometimes you “have” to look yourself in the mirror and say, “Hey stupid that wasn’t your best move, gut it up and make it right”.
For the record, I am a collector, not for personal or consumer debt, but business debt. We are not rude or unkind to the businesses that we call, but we get yelled at, cussed at, hung up on, etc. I work for a large corporation and people when they purchase things from us, sign a application agreeing to pay for those items within the terms (30 days) which are clearly specified on that application.
I ask this question very hypothetically, Why would people get mad or angry at us, when: 1) They bought the products 2) They took delivery of the products and consumed them in the process of doing business ? But yet, it happens everyday.
I say this because people complain about prices going up, businesses have to raise prices because when people purchase items on credit and then do not pay, it costs everyone a lot of more money. What people do when they do this, is the equivalent of going to the grocery store, filling up the cart with groceries and leaving without paying, then getting mad when someone calls expecting payment.
I agree that there are some unscrupulous debt collectors out there, they give those of us who are honest collectors a bad rap, but no one ever seems to address the fact that some businesses and consumers are at fault, etc.
I came in only on the very end of the show, but I have now watched the webcast and read related articles on ABC’s website. It doesn’t seem that I missed much.
As far as TV goes, I AM looking forward to Dave Ramsey’s upcoming series. That one, unlike most primetime offerings, will have my attention.
I too caught this show. I completely agree with your review. 20/20 covered a tiny bit of a lot of different territories. Each subject certainly rated it’s own hour.
The spender family were such a shame. Their unwillingness to live within their means and stupid financial decisions cost them their house. What in the world were they thinking buying not one, but two timeshares, as investments for gods sake. Even 10 minutes of research on the internet would have shown how foolish that was. Timeshares almost always go down in value and usually are very difficult to get out of. How could they be so stupid to part with over $100K without doing a few minutes of research? Hopefully they will wise up in the future.
I salute the saver family! I would have to be on hard times in order to live that disciplined a life style. It just goes to show the power of information and planning.
I felt 20/20 did a really piss poor job of covering the debt collectors. Certainly they showed the outrage, but it would have been great if they spent just a couple of minutes covering what legal debt collectors must do, cannot due, and how you should deal with it.
I strongly urge anyone who may be dealing with collectors to read the Fair Credit Collection Practices Act. It’s actually a very short piece of legislation that’s written in simple english that takes maybe 10 minutes to read. It covers exactly what debt collectors are allowed to do, what they are not allowed to do, and what they are required by law to do. An informed debtor could quickly shut down those abusive collectors by quoting the law to them, and telling them exactly what action will be taken against the collector if they continue.
Thanks for the recap, we didn’t watch it. Too bad more wasn’t shown about Dave Ramsey, I too have really learned A LOT from him. He is actually the only financial “guru” (for lack of a better word) I have clicked with and feel comfortable following his way to getting out of debt.
Listen to a Dave Ramsey podcast or three before making up your mind. I am guessing that like Karyn Bosnak, they may have pulled the most “thought provoking” (or just provoking) items out of the tape that they shot. He says and does some things that i disagree with, but the 7 steps and main concepts are sound and can easily be followed.
thought i would comment on your comment about bill collectors not having any rights to call folks at their place of employment. your comment isnt entirely true. they do have a legal right to call folks at work. what is illegal is calling their work after the collector has received a cease and desist letter asking that no more calls be made.
I’m really disappointed they painted Dave Ramsey in that light. He really knows his stuff, and he’s good at it. He’s tough and can be a sort of “Dr. Phil” of debt and personal finance – he won’t hesitate to tell someone they’re making a stupid mistake. But you know what? Maybe people *should* be told things like that.
It’s too bad they crammed so much into one hour. And I didn’t see it, so I don’t know if this was mentioned, but the Economides have made quite a bit of money from being debt-free: http://www.homeeconomiser.com/index.html